The third largest wireless carrier in the U.S. has posted a big loss in their latest quarter earnings, howver, it's a loss they've seen before.
Sprint Nextel Corp. announced today it lost $1.3 billion in the fourth quarter and it's the same loss seen in the fourth quarter of 2011. Oddly enough, the $1.3 billion loss is smaller than originally predicted, expecting 46 cents per share.
Good news for Sprint was revenue, seeing an increase of 3.2 percent, or $9 billion. The increase is up from the $8.7 billion seen in 2011's fourth quarter. A reason for the increase of revenue is customers purchasing or upgrading from regular phones to smartphones.
In the smartphone market, Sprint activated 2.2 million Apple iPhones, a record for the company. The record was made possible with the introduction of the iPhone 5 in September.
According to Technology Business Research Inc.'s Networking and Mobility Practice Research Analyst Eric Costa, Sprint will continue to struggle financially this year due to high costs of subscriber losses but could rebound in 2014.
"Sprint announced in December that it put in a bid to acquire the remaining 49 percent stake in Clearwire for $2.2 billion, or $2.97 per share. This acquisition is in the best interest for both companies as Sprint looks to strengthen its position in the market and Clearwire would not survive long term without a backer," stated Costa.
"This acquisition is beneficial for Sprint as it solves multiple issues that the operator has been facing recently," Costa added. "First, it provides Sprint with abundant high capacity spectrum with which it can complement and densify its new LTE network. It also solves lingering issues surrounding the relationship with Clearwire, which has gone through its ups and downs over the past few years. Sprint will now be able to offer fast LTE speeds and support high data traffic in its major markets."
The analyst says with the acquisition, it could help Sprint better compete with AT&T and Verizon.